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Failure to meet wage and price guidelines %
may bring American recession — economist
THE BATTALION
FRIDAY, FEBRUARY 16, 1979
Page 5
Flood ruins imported wine,
2,500 bottles destroyed
By BONNIE HELVVIG
Battalion Reporter
Americans may enter into an eco-
, omic recession this summer if
m and price guidelines set by
‘resident Carter are not met, an
AFL-CIO economist said at Texas
A&M University Thursday.
P Speaking on “Labor’s Concerns
d Issues Within the Economy,”
Bill Cunningham told SCON A 24
delegates that the guidelines fail to
joverthe major causes of inflation.
The biggest problems are in
ie alth care, food and energy costs,
diich have risen the most in the last
[wo years, he said.
We have a situation where infla-
ion has been 8 percent for the past
two
years and we are now moving
■ ” Cunningham
said
“If interest rates aren’t lowered,
redit is not increased, or if gov-
jmment spending on job programs
not cut, we will definitely move
into a recession,” he said.
The AFL-CIO has recommended
a full-fledged program of economic
control, Cunningham said, covering
all forms of income such as divi
dends, rent, professional fees, plus
wages and prices.
We did not favor this program
after the recession of 1974 caused by
the wage and price controls, but we
feel strongly that we must have a
mandatory program,” said Cun
ningham.
The U.S. trade policy has also ad
versely affected the economy, he
said.
The United States reported a $26
million trade deficit last year which
he said was proof of a failing trade
policy.
“Jobs are being lost because the
import of goods are coming in so
rapidly and flooding the markets,”
said Cunningham.
Cunningham said some foreign
companies can operate at 1 percent
profit, he said, due to federal sub
sidies from their own governments
to undermine the U.S. market,
living, will decrease it.”
United Press International
COLORADO SPRINGS, Colo.
— Imported wine, 2,500 bottles
worth, has been lost to wine lovers
and a local landfill.
A flood last July at the Broadmoor
Hotel’s cellar soaked the bottles of
wine, worth $20,000. The El Paso
County Health Department embar
goed the bottles and the Federal
Food and Drug Administration or
dered the destruction.
But Cunningham said Americans
were still more productive than
German or Japanese competitors,
according to a study done by a Ger
man bank.
“The Japanese rate of produc-
Bill Cunningham
tivity is increasing about 6.5 percent
each year, while we are increasing
our output by only 2 percent in the
1970s.”
Cunningham said that countries
like Germany and Japan are far be
hind the United States in technolog
ical advancement but are gaining
rapidly as their growth rate in-
Banker tells SC ON A group inflation,
unemployment have no easy solutions
By ERIN BECKERS
Battalion Reporter
There is no obvious solution to in-
and unemployment, a Dallas
inker said in a speech Thursday af-
>rnoon at a session of the Student
tern is less efficient. It is not as easy
to determine relative prices in an in
flationary period, which tell us
where to spend money and what to
produce, he said.
Burns listed four phases concern-
Dr. Joseph E. Burns
ing the relationship between unem
ployment and inflation.
The first, which he called a
theoretical notion, is that there is a
“permanent trade-off” between the
two.
Phase two states that the tradeoff
between the two is only temporary.
Burns said if policy makers at
tempt to reduce the unemployment
rate by stimulating economic policy,
unemployment will only decline for
a short period of time. “The adjust
ment period brings uncertainty,” he
said.
In phase three, the higher rate of
inflation pushes the unemployment
rate higher and does not return to
the original rate of unemployment.
“So efforts to reduce the unemploy
ment rate by stimulative monetary
fiscal policy are not actually counter
productive. They lead only to a
higher rate of inflation, which in
turn leads to higher unemployment
rate than would exist if nothing had
been done.
Phase four does not acknowledge
that there is a relationship between
the two and is known as the “ra
tional expectations theory.” Burns
mentioned this fourth phase briefly
“only for completeness.
int or she! inference on National Affairs;
aid. We ll probably continue to
iuddle along much as we have with
standard of living slowly being
roded,” said Dr. Joseph E. Burns,
:nior vice president of the Federal
eserve Bank of Dallas.
Economists can’t even agree
nong themselves, so not only does
tke man on the street hear one story
|e doesn’t understand, he hears two
(irthree,’ he said.
Burns’s speech, “The Inflation-
nemployment Problem, ex-
lained the basic causes of inflation
Jnd its relationship with unem
ployment.
The results in the research done
fi this subject are neither definitive
[r a unanimous agreement. It’s the
pisunderstanding of the problem
vhich allows the problem to per-
ls h Burns said.
The goal for the average citizen of
ie United States is the highest pos-
We standard of living, he said.
^Reduced levels of unemployment
Pprove standard of living, he said,
smaller amount of goods pro-
the blast'freed, less income is generated.
Las Vegasfress pie has been produced to be
st was cwfrtributed among the same number
I* People.”
maxinui®jWhen speaking on inflation,
150,000fr u ms said, “Unexpected changes in
Inces are costly and disruptive to
ntsofatrtC e economy. Expected rates of in-
i which pjjf at ' 0n can be planned for and can
d testinjlfr USe little disruption. He said the
srvedten®!.Expected change causes an in-
:h of l9^ t p r eiise in uncertainty,
n ratifi^E ”' s uncertainty causes the busi-
A e ssman to spend more time trying
P e dge against inflation and less
Me toward his business.”
ouseholds also attempt to hedge
fnst inflation. Burns said. “They
ac e more of their wealth on
10us es, durable goods and real es-
elied on
said wit
uh
ltd
r ad
national
» v , — Si
:ed the f
:ar test wl
n 20
detonated
om of a 1
e Nevada!'
FOSTER STAINED
GLASS STUDIO
Largest Selection of
Stained Glass Supplies
Etching Workshop Saturday 9-12
(Call to reserve your place)
2801 S. College 779-5864 M-Sat. 9:30-5:30
MANOR EAST 3
FRI.-SAT. MIDNIGHT
WELCOME TO THE 23™ CENTURY.
The only thing you cant hove in this
perfect world of total pleasure is your 30th birthday.
icluding
ound ki*
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; camera
d with s|
levices
°f Eneifre lather than financial assets,
ati0D*|l as deposits, stocks and bonds.
dh the reduced incentive to
Ve - a nd invest- c\/s-
Logon is 29.
METRO-GOLDWYN-MAYER presents A SAUL DAVID PRODUCTION LOGAN S RUN
stamnn MICHAEL YORK ■ JENNY AGUTTER • RICHARD JORDAN • ROSCOE LEE BROWNE
FARRAH FAWCETT-MAJORS & PETER USTINOV • screenplay by DAVID ZELAG GOODMAN
F ^,SL A A N c, a ^Sl CLAYT0N J0H 2L N
Produced by SAUL DAVID - Directed by MICHAEL ANDERSON MGM
|PG Filmed inTODD-AO and METR0C0L0R |NOW A bantam Bog^P Release<)ih , u
' United Artists
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333 University 846-9808
The only movie in town
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DOLBY STEREO | ®
Cunt
KING
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Eastwood
OF1HE
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WILL TURN
YOU
CHPSIH
its ALMOST his time
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‘Every
IRI (OWTtBMt AMOUNT
+
Which Way
But Loose’
A MALPASO COMPANY FILM ^
Distributed by WARNER BROS
ALL RIGHTS FESE/MED
If
JF
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ah
SKYWAY TWIN
WEST
COIN’ SOUTH
PLUS
CITIZEN’S BAND
EAST
OLIVER’S STORY
PLUS
FIRST LOVEU
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PARADISE ALLEY
STARRING
SYLVESTER STALLONE
FRI.-SAT. MIDNIGHT: ROCKY HORROR
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Friday & Saturday
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WHICH
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Richard
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rated R
February 16
Auditorium
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PLITT Southern
UNIVERSITY SQUARE SHOPPING CENTER 846-6714 8. 846-1151
CINEMA
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Mr
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“LOVE
and DEATH”
A JACK ROLLINS—CHARLES H.JQFFE PRODUCTION
Produced by CHARLES H. JOFFE Written and Directed by WOODY ALLEN
PGlPARENTAL GUIDANCE SUGGESTED! United Artists
SOME MATERIAL MAY NOT BE SUITABLE FOR PRE TEENAGERS «
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WINNER 1972 CANNES FILM
FESTIVAL JURY PRIZE AWARD
Only American Film to be so Honored
Billy
Pilgrim
lives
from time
to time
to time...
fCniirTIIIITTTHIIIlIIIIlUlllP